Question

distinguish between internal reconstruction and external reconstruction of companies

Answer 1

Internal reconstruction refers to makinginternal arrangements for overcoming financial difficulties. Differences betweenamalgamation and external reconstruction 1. Amalgamation of companies involves liquidation of two or more companies, whileexternal reconstruction involves liquidation of only one company, 2.

Answer 2

Internal reconstruction  and  External reconstruction

Explanation:

Internal reconstruction

• Internal reconstruction refers to the method of corporate restructuring wherein existing company is not liquidated to form a new one.
• No new company is formed.
• Approval of court is must.
• No such transfer takes place.

External reconstruction

• External reconstruction is one in which the company undergoing reconstruction is liquidated to take over the business of existing company.
• New company is formed.
• No approval of court is required.
• Assets and liabilities of existing company are transferred to the new company.

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